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ABCC Law Changes Explained

(This article was first published in the Australian Financial Review on Wednesday, 23 November 2016)

In the next two weeks the Turnbull government will attempt to negotiate the passage of its industrial relations bills through the Parliament. The most controversial is the bill restoring the Australian Building and Construction Commission (ABCC). While there will be much heat and fury surrounding this bill it is worthwhile, before hostilities commence, to consider exactly what has been proposed and why the approval of the bill is crucial to Australia's economic wellbeing. The construction industry is of critical importance to our nation's economy and for too long it has been held hostage to the reckless and unlawful behaviour of the CFMEU.

The ABCC bill seeks to restore the former building industry regulator and some of the measures proposed are these:

Expanded definition of building work

The bill proposes expanding the definition of building work to cover transport and supply to building sites. This is a necessary and desirable measure because as history has shown the Construction, Forestry, Manufacturing and Energy Union (CFMEU) has often pursued suppliers and transport companies to put commercial pressure on the builder. By choking off its supply line and pressuring innocent third parties, the CFMEU's tactic is to cause a collapse in the builder's resistance in enterprise agreement negotiations. How any member of parliament could think that a provision dealing with this deliberate behaviour is a bad thing defies belief.

Unlawful pickets

The bill attempts to deal with the whole issue of unlawful pickets. The CFMEU often brings organisers and agitators from other sites and interstate to blockade the construction site of its target builder. These so-called "community protests" were most sharply manifested in the Grocon dispute in the Melbourne CBD a few years back. In this area of the bill, picketing is made unlawful except for those actual persons who are permitted to and are taking protected industrial action in support of their claim for an enterprise agreement.

Those persons taking protected action are limited by the terms of the protected action order with respect to the precise actions they might take. The interstate officials and agitators of course have no such limitation. It has long been the CFMEU's tactic to mix the population of protesters outside a building site so that it is very difficult for anybody to know who is taking protected action and who is not. The result is an ugly scene replete with intimidation and violence.

Those opposing this measure simply state that they are exercising their right of freedom of association. Patently, the meaning of freedom of association to these people is different from that provided under the Fair Work Act. Freedom of association in this parallel universe means the freedom to bully, intimidate and to cause commercial loss. This is a worthwhile and overdue improvement.

The bill would see significant increases in penalties for both individuals and corporations including unions. The only question that arises is simple – is this measure justified? If one reads any one of the recent Federal Court judgments involving the CFMEU, you will see judicial language criticising the union in the severest terms possible.

Justice Christopher Jessup recently stated that the CFMEU's "record of non-compliance with legislation of this kind has now become notorious. That record ought to be an embarrassment to the trade union movement ... quite obviously over the years the CFMEU has shown a strong disinclination to modify its business model in order to comply with the law."

These are very strong words for a judge and in the clearest terms possible he is making out the case for higher penalties. Quite simply the current regime of penalties, set by the former Labor government, is no deterrent at all to the CFMEU. Breaking the laws of this land has simply been priced by the CFMEU as the cost of doing business. Given that the penalties are obviously no deterrent they need to be increased to a level where observance of the law becomes the more desirable alternative.

Reintroduction of coercive powers

This is probably the most controversial of the proposals in the bill. This part of the bill reintroduces the powers of the commissioner to require a person to answer questions or produce documents even if that might tend to incriminate the person.

This is not a unique provision in Australian law. It appears in some of the states' Work Health and Safety laws, coroners have this power and there is a power provided to certain police forces in a similar vein. However, the person subject to the exercise of the power in the ABCC bill is given the benefit of a derivative use indemnity. Namely, none of the evidence so supplied can then be used against that person.

In his recently concluded Royal Commission, Justice Dyson Heydon revealed that widespread misconduct, thuggery, bullying and threats of violence were commonplace events in the construction industry. Clearly when unlawful activity takes place at building and construction sites, those who witness it understand – too well – the cost of cooperating with the authorities. This and a combination of the code of silence normally seen in criminal gangs makes the investigation and prosecution of these matters even more difficult.

Therefore it is entirely appropriate for this unacceptable situation to be subject to coercive powers. The opposition to this particular measure completely fails to have regard to the threats and intimidation which are unfortunately the daily staple of the construction union.

The errant and unlawful behaviour of the CFMEU has made the construction industry in Australia high cost and high risk. But apart from the money the human cost is immense. Young engineers and construction workers entering this industry are quickly brutalised and have to make up their mind about going along with this culture, defying it or leaving the industry altogether. This is a miserable picture for 21st-century Australia and the community deserves better from its politicians. These are the people whom the ABCC bill will protect: the future workers in the construction industry.

So the question for the politicians, particularly the independents, is this: Will the manifest public interest prevail or will the politicians cave into the CFMEU's power?

In the early hours of Tuesday morning, the Parliament passed the Registered Organisations Bill. This is an Act which is aimed at enhancing internal trade union governance and is one of the direct results of the Heydon Royal Commission. Labor and union resistance to this bill all but evaporated because the conduct it is designed to deal with is indefensible.

A curious development was the Labor suggestion that the Australian Securities and Investments Commission be the regulator rather than a dedicated registered organisations regulator. Labor and the unions have long resisted having unions' affairs regulated in a manner similar to their corporate adversaries and are probably banking on ASIC being too busy with its other functions to be particularly concerned with union officials and their corporate credit cards.

At a time when a number of former union officials are before the courts it seems that the former resistance to this long-overdue reform has evaporated.

What is curious is that the same thinking on the Labor/Green side of politics as has been applied to the Registered Organisations Act is completely absent when it comes to the ABCC. Both bills deal with significant and ongoing issues with union behaviour. The ABCC resistance simply proves the hold that the CFMEU has upon left-of-centre politics in this country.